Chronic depression affects approximately 5 percent of adults in the United States and is associated with significant functional impairment and high health care utilization. Recent work supports the efficacy of established antidepressant medications with chronic depression. However, only a minority of patients with chronic depression attain full remission in these trials: approximately 50 percent do not respond, and an additional 20 percent achieve only a partial response. A recent multi-site study (Keller et al., 2000) demonstrated that the combination of medication and psychotherapy produced a significantly better response than either monotherapy. Unfortunately, combination treatment is expensive. It may be more efficient to employ a stepped approach, in which patients first receive medication, and only non-responders and partial responders receive adjunctive psychotherapy. We propose to conduct the first large-scale study of adjunctive psychotherapy in chronic depressives who fail to respond, or respond only partially, to an initial trial of medication. This multi-center trial will compare 12 weeks of adjunctive treatment with the Cognitive Behavioral Analysis System of Psychotherapy (CBASP), the form of psychotherapy with the best evidence for treating chronic depression, with adjunctive treatment with Supportive Psychotherapy (SP) and continued pharmacotherapy alone, in patients with chronic forms of major depression. Separate trials will be conducted in patients who fail to respond to an initial open trial of serotonin reuptake inhibitor (SSRI) and in patients who achieve only a partial response. In addition, we will conduct naturalistic follow-up assessments at 6- and 12-months post-treatment. The specific aims of the project include: (1) comparing the efficacy of adjunctive psychotherapy to continued SSR] alone; (2) determining whether adjunctive CBASP is specifically efficacious compared to adjunctive SP; (3) testing the hypothesized mechanism of action of CBASP, as well as exploring potential moderators of response, and (4) comparing the cost-effectiveness of the three treatment conditions for treatment resistant chronic depression. The outcomes examined will include both symptomatology and psychosocial functioning. In addition, we will conduct exploratory analyses comparing the effect of the three treatment conditions on relapse and post-treatment service utilization. This would be the first large-scale study ever to test the efficacy of any therapy for treatment resistant chronic depression, and to study the value of psychotherapy augmentation in medication non-responders with any form of depression.